Cathedral assists the company through the decision and negotiation process regarding an acquisition,financing,sale,mergers,buy-sell agreements, or turn-around to bring it to a successful resolution. We assist clients in assessing their needs, preparing them for the transaction, potentially introducing them to funding sources, and aiding in the negotiation of terms.

Services

Cathedral is not a business broker or investment banker. In these engagements Cathedral acts as a consultant/advisor. Cathedral has found that our clients know who the counter party to the transaction should be and tend to need packaging, transaction strategy and execution support. In its role Cathedral does not take contingent fees or equity interests. Below is a list of the services that are offered through Cathedral’s Merger & Acquisition Consulting.

Through the use of a systematic approach, we assist in the acquisition process which includes the analysis and pricing of the target, performing due diligence, and designing a term sheet which will bring the process to a successful closure.

Process: When considering an acquisition a company first needs to ask the purpose for doing so and how this will be funded. Through the use of a systematic approach, Cathedral assists in the acquisition process which includes the following:

Assess:

Determine how the acquisition fits into company strategy

Assess the sources of funding and potential payment structure

Prepare and Identify:

Identify a target(s)

Analyze and price the target company

Present an Expression of Interest

Negotiate and Close:

Perform due diligence

Design Term Sheet

Close the deal

Case Study: As part of an overall strategic plan, Cathedral assisted a manufacturing company in acquiring two related businesses over a two year period. A potential value was established and clarified through a due diligence period. This resulted in a very low price for one acquisition and a creative payment structure for the second that met the needs of all parties. Integration and transition were wrapped up in Cathedral’s Board Services program.

Company Sale

Following an assessment and creation of a transaction package, we assist in the negotiation of agreement with the potential buyer.

Process: Cathedral works with the owner or management team to facilitate a process that maximizes value to the seller and drives the transaction to the desired completion. Cathedral utilizes the following approach in the sale process:

Assess:

Assess the potential value of the business and determine desired price and payment structure

Determine that the business is prepared to sell at the value desired

Prepare and Package:

Create an information package that communicates clearly with the prospective buyer

Prepare a due diligence package

Identify a buyer(s)

Introduce:

Present the information package to the buyer

Receive an Expression of Interest

Provide a Due Diligence Package

Negotiate and Close:

Design Term Sheet

Close the deal

Provide a Due Diligence Package

Case Study: Through careful packaging and demonstration of buyer synergies, Cathedral assisted an online specialty retail business in achieving their desired price. A seller financed payment structure allowed the buyer to immediately purchase the company in a timeframe acceptable to the seller. The transaction was completed virtually with the assistance of current technology.

Financing

We begin with an assessment of need and the best possible sources for funding, followed by the creating of a presentation and introductions and negotiations with potential funding sources.

Process: In a changing environment, Cathedral works to facilitate the funding of the business for growth or current operational needs. Sources might include banks, investors, angels, or factors. Cathedral utilizes the following approach in the financing process:

Assess:

Assess the amount of funds needed and that it will lead to a self-sustaining business

Determine the most appropriate source of funds

Evaluate the preparedness of the company to approach funding sources

Determine adequate cash flow for repayment or adequate ROI

Prepare and Package:

Create an information package that is appropriate to the funding source

Identify potential funder(s)

Introduce

Present the financing package to the funder(s)

Follow up with funder(s)

Negotiate and Close.

Design Term Sheet or review bank applications

Close the transaction

Case Study: Cathedral worked with a buyer to negotiate the purchase of a professional services firm and simultaneously secure the funding to complete the acquisition. A financial model was vital to demonstrate adequate ROI to the investor.

Mergers

Process: A successful merger begins with the vision of creating a win-win for all parties. It ends with well with the implementation of a transition plan. Cathedral utilizes the following approach in the merger process:

Assess and Prepare:

Determine how the merger fits with each company’s strategy

Review the identified party(s)

Determine the vision of the companies to merge and how together growth will be attained

Determine the potential structure of the organization for management, economics, and ownership

Package:

Create a merger package that shows the new entity and how the pieces come together

The development of a model supplies the economic picture

Negotiate and Close:

Determine the compensation and company structure

Design Term Sheet which includes a Buy-Sell Agreement

Close the transaction

Implement the transition plan through the structure of Cathedral’s Board Services program

Case Study: Three small consultant/advisor professional service firms merged to create a successful entity with 40% growth over three years. Cathedral helped the partners create a shared vision, determine the economics, and document these in a Buy/Sell Agreement.

Buy-Sell Agreements

We assist owners in the creating of a term sheet for drafting a Buy-Sell Agreement designed to create liquidity between the partners of the business.

Process: We assist owners in the creation of a term sheet for drafting a Buy-Sell Agreement designed to create liquidity between the partners of the business. This is often required in transactions as well as added to many small businesses that operate without one. Cathedral uses the following approach for the creation of a Buy/Sell Agreement:

Assess: (this phase is required only if the Buy/Sell is not within a transaction)

Review of the business and financials, including the investments of each owner

Prepare and Package:

Create a recommendation package that includes an ownership strategy

A financial model assists in understanding the economic picture

Negotiate and Close:

Present the financing package to the funder(s)

Follow up with funder(s)

Negotiate and Close.

Ownership agreement is designed with a term sheet to resolve the following points:

Triggering Events

Value

Pay-out

Review legal documentation of term sheet.

Close the transaction.

Case Study: In an ownership struggle of a private company, Cathedral uses the buy-sell agreement to clarify owner needs and aligns a go forward program. Two years later one of the owners exercised the rights in the agreement and was successfully bought out.

Turn-Around Program

We assist small businesses in efficiently assessing the company’s current situation and making decisions for going forward regarding the status of the company.

Process: Cathedral’s efficient process allows a quick assessment of the company’s current situation to make life and death decisions for the going forward status of the company. Cathedral uses the following approach for turn-around situations:

Situation Assessment

The initial assessment focuses on the analysis of the company’s financial statements as well as the development of a current and accurate Balance Sheet.

Short-Term Cash Flow Assessment

A cash flow forecast is developed to determine whether all operating expenses can be covered prior to debt service.

Alternatives Assessment

Based on the cash flow assessment, the company will determine whether to create a going concern or dissolve the company.

Implementation Plan

A six month plan will be designed to implement the decision taken.

Implementation Support

Regular support is provided to ensure plan implementation.

Case Study: Cathedral assisted a jewelry company through the dissolution of its current wholesale business which experienced difficulties in the economic downturn of 2008. The company chose to strategically re-create themselves as a custom design jeweler through the implementation of this turn-around process.